Cash America 2012 Annual Report Download - page 102

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Proceeds From Disposition of Merchandise
The following table summarizes the proceeds from the disposition of merchandise and the related profit for the
years ended December 31, 2011 and 2010 (dollars in thousands):
Year Ended December 31,
2011 2010
Retail Commercial Total Retail Commercial Total
Proceeds from disposition $ 358,695 $ 330,189 $ 688,884 $ 313,206 $ 274,984 $ 588,190
Gross profit on disposition $ 137,620 $ 103,647 $ 241,267 $ 123,701 $ 82,022 $ 205,723
Gross profit margin 38.4 % 31.4 % 35.0 % 39.5 % 29.8 % 35.0 %
Percentage of total gross profit 57.0 % 43.0 % 100.0 % 60.1 % 39.9 % 100.0 %
The total proceeds from disposition of merchandise increased $100.7 million, or 17.1%, during 2011 from 2010,
and the total profit from the disposition of merchandise increased $35.5 million, or 17.3%, during 2011 from 2010. The
increase in proceeds and profit was mainly due to an increase in merchandise available for sale generated from
forfeitures from the Company’s higher pawn loan balances and an increase in merchandise purchased from customers
and third parties. The consolidated merchandise turnover rate decreased slightly to 3.1 times in 2011 from 3.2 times in
2010.
Proceeds from retail sales, including jewelry, increased $45.5 million, or 14.5%, during 2011 compared to 2010.
The increase was primarily due to organic growth in the Company’s domestic retail operations and the acquisition of
retail services locations in late 2010 and 2011. However, the profit margin on retail sales decreased slightly to 38.4% in
2011 from 39.5% in 2010, due primarily to discounting of merchandise prices to encourage retail sales activity.
Proceeds from commercial dispositions increased $55.2 million, or 20.1%, in 2011 compared to 2010. The profit
margin on commercial sales increased to 31.4% in 2011 from 29.8% in 2010. These increases were mainly due to a
higher average market price of gold and diamonds sold, which more than offset a lower volume of gold sold during 2011
compared to 2010 as a result of lower forfeiture rates on the Company’s pawn loan portfolio secured by jewelry.
The table below summarizes the age of merchandise held for disposition related to the Company’s pawn
operations before valuation allowance of $0.7 million as of both December 31, 2011 and 2010 (dollars in thousands):
As of December 31,
2011 2010
Amount % Amount %
Jewelry – held for one year or less $99,683 61.3 $85,117 64.7
Other merchandise – held for one year or less 56,483 34.8 40,815 31.0
Total merchandise held for one year or less 156,166 96.1 125,932 95.7
Jewelry – held for more than one year 2,626 1.6 2,685 2.0
Other merchandise – held for more than one year 3,792 2.3 3,039 2.3
Total merchandise held for more than one year 6,418 3.9 5,724 4.3
Total merchandise held for disposition $162,584 100.0 $131,656 100.0